What is paperless accounting?

With the rise of digital accounting software like Xero, paperless accounting is becoming a common trend for businesses globally. So, what is paperless accounting?

Paperless accounting is the processing, measurement, and communication of financial accounts without the use of paper. Payroll, invoicing, expense reporting, and other accounting tasks are all handled digitally, streamlining the business processes.

What are the benefits of paperless accounting?

There are a lot of compelling reasons to adopt a paperless account system, here are a few to consider:

1. Increased productivity

Paperless accounting enables a quicker workflow by supporting and streamlining your business activities, as well as providing secure access to your accounting from anywhere.

2. Reduced storage, expenses and waste

By going paperless in accounting, you can save money spent on paper, printing, and storage, as well as reduce the space taken up by storage in your office, and the amount of waste your office creates.

3. Automate your accounting

Most accounting software provides options to automate your accounting processes, such as automatically sending invoice reminders. You can also connect Xero with an app like Zapier to automate processes that occur between Xero and other apps, such as Google Spreadsheets, Microsoft OneDrive, and more.

4. Data recovery

By storing your documents on the cloud, your data is quick and easy to recover in the event of a disaster or theft.

How do you set up paperless accounting?

The first step is to organise your existing paper documents into different groups, such as putting invoices in one pile, purchase orders in another, and so on.

After you have done that, the next step is to capture your data to put it into accounting software like Xero, or something more basic such as a file storage service like Google Drive. To get the full benefit from paperless accounting, I recommend putting your data on the cloud with accounting software.

The simplest way to capture your data is to scan it and save it, but by doing data-entry you can search and use the information from your old accounting documents better. Most accounting software also offers features to automatically read and capture financial data from scannings, such as Hubdoc from Xero.

The next step is to change your business processes into digital workflows so that you no longer accumulate or rely on paper for your accounting. Consider at which steps of a business process you receive, use, or send paper, then consider alternatives such as:

• Receiving bank statements via email instead of by mail.
• Sending invoice reminders by email.
• Setting up an automation to automatically upload any invoices received by email into Xero.
• Replacing sick leave and holiday leave paper forms with a digital alternative like Google Forms.

After you have created an outline for how your business processes will change, put together a training plan or demo session with your team and schedule a date for it to go into effect. 

Remember, you don’t have to go paperless overnight, a gradual change can still see a positive impact on your productivity and other paperless benefits.